Should You Invest In A New Or Established Property?
What is going to make a better investment for you
When starting your property portfolio, you may be faced with a number of questions, like should you buy a new or existing property? When you’re deciding which option is right for you and your future investment goals, it’s important to understand what sets each option apart.
Investing in new property:
Buying a new property can be beneficial for investors as there are many depreciation advantages to be claimed as a tax deduction.
A new property often costs less to maintain and tenants are usually more willing to pay higher rent prices for a brand new property.
It’s also worth considering the different ways to get into the market if something new appeals to you. There are a bunch of possibilities when it comes to investing in a brand new property.
A house and land package:
House and land packages are a popular choice to get your hands on a brand new build.
House and land packages are predominantly found in new estates in developing suburbs so you’ll want to check the proximity to schools, shops and public transport that may appeal to potential renters in the future.
Buying off the plan:
Buying off the plan involves purchasing a property that hasn’t been built yet, which are often either townhouses or apartments.
There are several benefits to buying off the plan properties like stamp duty savings, and discounts or government incentives to entice investors to buy before the build is completed.
If you’re considering buying off the plan, you’ll want to keep in mind that the property market could fluctuate during the build of your investment meaning it could end up worth less than when you originally purchased it.
Investing in an established property
Investing in an already established property can take the stress out of building a brand new place. An established property may even have tenants living in there when you purchase it and may even be sold with the tenants. This means that you will immediately begin earning rental income from the property making it a viable investment.
Apartments vs Houses
Apartments can be more affordable than houses which could make them a good choice for investors. They also have the potential to purchase higher rental yields than houses which is great news if you’re looking to make rental income on a small budget.
Units could also be a great choice for investors as they may have lower council rates and maintenance requirements. If you’re purchasing a unit though you’ll want to remember that you may need to pay body corporate fees to help maintain the common areas.
Deceased estates
Property that’s sold as a part of someone’s deceased estate could be an opportunity to get a good deal on an established property. You will want to be aware of any potential downsides to a deceased estate though if that’s something you’re considering investing in. Deceased estates may need extensive repairs or renovations before it can be leased out to tenants if it is quite an old home.
If you’re investing in a deceased estate you’ll want to ensure you have the money available to complete any necessary renovations or repairs.
What’s going to be best for you?
When you’re considering investing in property, it’s always best to consult with the experts. Our team at AllianceCorp offers you a range of services and advice that can help you make an informed decision when it comes to investing in property.
If you want to chat further about whether a new or established build is right for you you can contact us today to book in a free consultation to start expanding your property investment portfolio.